Google Apps - MS Office Killer?

Google is rolling out a major upgrade of Google Apps that seems squarely aimed at the business market.

On Thursday, Google will introduce a Google Apps version that, for a fee, offers guaranteed uptime, IT management tools, technical support, increased e-mail storage, and integration with the Docs & Spreadsheets word processing and spreadsheet applications, as well as BlackBerry support for Gmail.

With a cost $50 per user per year, Google Apps Premier Edition becomes the third and most sophisticated version of the suite, which was launched in August with the free Standard Edition and Education Edition versions. Like the original editions, Premier will have services like Gmail Web mail, Calendar shared scheduling, and Talk instant messaging. (Infoworld: Google Apps upgrade threatens Office)

This is an interesting strategy indeed. While there was little doubt that the free Google Apps would attract some budget-conscious home and very small business users, they posed little threat to Microsoft’s business user base. Now, they are clearly looking to move upward in the market.

The IT Priesthood. For companies that have an IT staff, Google Apps will raise internal conflict. I think the knee-jerk reaction of many IT-types will be to say, “We can’t give up that control. Do you really want Google hosting our mission-critical applications and data?” There’s a sort of priesthood in the IT departments of many companies, and letting users interact directly with apps and data on Google will seem, well, heretical. CEOs, on the other hand, would be happy to outsource at least a portion of their support to a positively-viewed firm like Google, and free themselves (at least a bit) from the grip of the IT hierarchy.

In addition, a highly centralized company data model is getting more difficult to adhere to anyway - home workers, mobile users, contractors, etc., all need quick and easy access to company resources, and these corporations are having to develop elaborate external access systems anyway.

We don’t think it will be an overnight disaster for Microsoft, but I do expect Google to make slow but steady inroads as it moves into the next tier of businesses. Microsoft will have to make good on its own promise of easy to use hosted applications, and probably reduce the complexity and cost of its product line and licensing schemes.

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